Leverage gains to improve financial inclusion — Non-Bank Financial institutions advised
THE Executive Secretary of the Ghana Microfinance Institutions Network (GHAMFIN), Yaw Gyamfi, has charged Non-Bank Financial Institutions (NBFIs) to leverage the gains made in the sector to improve the current state of financial inclusion in the country.
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The industry suffered serious reputational issues after the banking sector crisis that rocked the country and forced the public to lose interest in its operations.
The crisis forced the government to undertake a banking sector clean-up, aimed at ensuring the orderly exit of insolvent institutions to protect depositors' funds and also ensure the safety and soundness of the banking sector which was in a state of distress.
Since then, the network comprising the surviving institutions has worked to rebuild their image and restore confidence in the people, a development that has yielded appreciable results in the last couple of years.
Mr Gyamfi explained that microfinance has contributed significantly to financial inclusion and the processes continue to evolve through a technological lens.
“It is critical and instructive to sustain the level of inclusion as people are discouraged from being out of the inclusion ecosystem because of the actions and inactions of the relevant stakeholders.
The industry players and other relevant stakeholders should be proactive in projecting the gains to allow more to be included through innovative processes,” he said.
Mr Gyamfi was speaking at the 2nd Non-Bank Financial Institutions Awards & Dinner Night held in Accra.
Held under the theme “Sustaining the Gains of Inclusive Finance through Innovation and Technology”, the event was organised by GHAMFIN in collaboration with the Financial Inclusion Advocacy Centre. The scheme aims to celebrate the successes of the NBFIs in their intermediation roles.
He said GHAMFIN as the umbrella body continues to celebrate excellence, and credibility to award the best while encouraging the weak ones in the industry to improve and be more sustainable.
Mr Gyamfi added that it was only by working together, sharing best practices, driving up standards and supporting those who are committed to improving their offer to their clients that individual NBFIs and the sector will reach their full potential.
Unlicensed entities
Expressing worry over the increasing number of unlicensed entities that are engaged in the provision of loans through mobile applications to Ghanaians, Mr Gyamfi said the sector faced heightened competition from these unregulated foreign entrants who undermine the sustainability of microfinance institutions and weaken the critical role played in promoting financial inclusion for economic growth.
In an interview with the media regarding the development which has become the norm in recent times, he said although the central bank was taking action against those entities, citizens also needed to play their role, adding that “you don't just have to jump into anything, especially when you do not understand them and how they operate.
You know these unlicensed operators come with all sorts of juicy approaches. If you're not careful, you will end up throwing away your money.”
Financial literacy
He further called on financial institutions to intensify their financial education to warn customers against financial scams.
“I'll take this opportunity to encourage people, especially the financial institutions, that as they go about doing the businesses, they should also conduct some form of financial literacy; educate the people on some of these things, so that they will be well informed before engaging these illegal operators,” he added.
According to him, a study shows that most of these institutions operating online are operating from as far as Mexico.
“How do you sit in Mexico and operate in Ghana?” he quizzed.
Winners
Sinapi Aba Savings and Loans Ltd. received the Most Gender-Focused Microfinance Institution (MFI) award while Advans Savings and Loans Ltd won the Contribution to Financial Literacy award.
Best Point Savings and Loans Ltd. received the Most Innovative Product of the Year award while Asa Savings and Loans Ltd won the Best Microfinance Methodology and Highest Outreach in Rural Areas awards.
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LetSheGo Savings and Loans PLC and Pan-African Savings and Loans Ltd were both awarded Best in the Promotion of Financial Inclusion. The Best in Corporate Governance award was won by Bayport Savings and Loans PLC while the Best Disability Product and Best Sustainable MFI in Agriculture Financing award was won by Opportunity International Savings and Loans Ltd.
Other winners include Leverage Microfinance Company Ltd, FWF Microfinance Company Ltd, Baobab Microfinance Company Ltd, Aguadifo Boafo Susu Enterprise, Mabugri Confident Enterprise, Cash Tech Enterprise, Global Impact FNGO and Abrabopa MicroCredit Enterprise.
The rest are UEW Co-operative Credit Union Ltd, Winners Co-operative Credit Union Ltd, Salaga Co-operative Credit Union Ltd, West One Microfinance Ltd and Central Microfinance Ltd.